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Date : Sep 30, 2022

Bank Lending Survey for Q2:2022-23

Today, the Reserve Bank released the results of 21st round of its quarterly Bank Lending Survey (BLS)¹, which captures qualitative assessment and expectations of major scheduled commercial banks (SCBs) on credit parameters (viz., loan demand and terms & conditions of loans) for major economic sectors². The latest round of the survey collected senior loan officers’ assessment of credit parameters for Q2:2022-23 and expectations for Q3:2022-23. Owing to uncertainty driven by the COVID-19 pandemic, an additional block was included in this survey round for assessing outlook for two quarters ahead as well as three quarters ahead.

Highlights:

A. Assessment for Q2:2022-23

Bankers assessed improvement in loan demand on a sequential basis across all major sectors (Chart 1 and Table 1).
Respondents reported easy loan terms & conditions albeit with some lowering of pace for agriculture, mining, and infrastructure loans (Table 2).

B. Expectations for Q3:2022-23

Bankers expect loan demand to improve further across all major sectors during Q3:2022.
Loan terms & conditions are expected to ease further during Q3:2022-23.

C. Expectations for Q4:2022-23 and Q1:2023-24

Bankers remain upbeat on loan demand during January-June 2024 across the major categories of borrowers (Table 3).
Easier loan terms & conditions are anticipated in Q4:2022-23 and Q1: 2023-24.

Table 1: Sector-wise Loan Demand - Net response³
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q1:2022-23	Q2:2022-23	Q2:2022-23	Q3:2022-23
All Sectors	33.9	40.0	42.9	43.3
Agriculture	36.2	38.3	34.5	41.7
Mining and Quarrying Sector	14.3	6.9	3.6	12.1
Manufacturing	34.5	41.7	43.1	48.3
Infrastructure	37.5	41.7	37.5	40.0
Services	35.7	46.7	44.6	45.0
Retail/Personal	42.0	50.0	44.4	53.6

Table 2: Sector-wise Loan Terms and Conditions - Net response
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q1:2022-23	Q2:2022-23	Q2:2022-23	Q3:2022-23
All Sectors	8.9	5.2	8.9	12.1
Agriculture	13.8	10.0	13.8	20.0
Mining and Quarrying Sector	8.9	5.2	5.4	8.6
Manufacturing	19.0	20.7	10.3	31.0
Infrastructure	12.1	6.9	10.3	12.1
Services	19.6	22.4	16.1	22.4
Retail/Personal	18.8	19.6	18.8	28.6

Table 3: Sector-wise Expectations for extended period - Net response
(Per cent)
Sectors	Loan Demand		Loan Terms and Conditions
Sectors	Q4:2022-23	Q1:2023-24	Q4:2022-23	Q1:2023-24
All Sectors	46.7	36.7	18.3	20.0
Agriculture	45.0	41.7	16.7	16.7
Mining and Quarrying Sector	15.5	8.6	8.6	8.6
Manufacturing	41.7	40.0	20.0	21.7
Infrastructure	43.3	46.7	11.7	16.7
Services	55.0	48.3	16.7	16.7
Retail/Personal	51.7	50.0	26.7	28.3

Note: Please see the excel file for time series data.

¹ The results of 20th round of the BLS with reference period as April-June 2022 were released on the RBI website on August 05, 2022. The survey results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank.

² The survey questionnaire is canvassed among major 30 SCBs, which together account for over 90 per cent of credit by SCBs in India.

³ Net Response (NR) is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameter. The weights of +1.0, 0.5, 0, -0.5 and -1.0 are assigned for computing NR from aggregate per cent responses on 5-point scale i.e. substantial increase/ considerable easing, moderate increase/ somewhat easing, no change, moderate decrease/ somewhat tightening, substantial decrease/ considerable tightening for loan demand/loan terms and conditions parameters respectively. NR ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. Increase in loan demand is considered optimism (Tables 1), while for loan terms and conditions, a positive value of net response indicates easy terms and conditions (Table 2).